JSDF : TSUNAMI RELIEF PROGRAM Financial Management

Bank Financial Management Financial management is a process which brings together planning, budgeting, accounting, financial reporting, internal control, auditing, procurement, disbursement and the physical performance of the project with the aim of managing project resources properly and achieving the project's development objectives.

Features JSDF 1JSDF 2 1Executed byBankRecipient 2Grant Agreement (GA) TF $1,950,000 TF $960,000 3Closing DateApril 30, 2007July 31, Status of IAPartnership PDA, LDI, CCT Implementing agency WVFT 4FM obligationsTOR-7 and OMGA-section 5 5DisbursementsTOR-8 and 9GA-section 4

Trust Fund Execution Agency Role ( Recipient Executed) Implementing and Managing the use of trust funds in conformity with the agreed guidelines and procedures as stipulated in the grant agreement. Partner Role (Bank Executed): Assist the Bank as a consultant/partner to carry out activities according to the TOR and partnership agreement Bank Role: Supervising trust fund administration, assuring quality of TF activities, and objective of the grant.

Roles-Implementation Implementing and m anaging the use of trust funds. –Managing the agreed activities –Managing the procurement processes – Managing the use of funds –Quality control Upon completion:prepare and furnish a report on the results and impact of the activities.

Roles-Supervision Review and approve proposal, check output and outcome Agree the proposed selection process and method of procurement ( for certain contract requiring prior Bank review/approval) FM Role – ensure appropriate uses of fund; review approving criteria, subproject costing, supporting documents and physical existence against cost.

Disbursement Requirements WORLD BANK NGO EA NGO Partners SUB PROJECT FUND CONTRACTS/SUPPLIERS/BENEFICIARIES JSDF 1 – WBOB- PA – Fees and Sub-grants as a Bank consultant JSDF 2 – Manila–GA - Special Accounts/ advance/ replenishment (WB Disbursement Guidelines/ handbook/ letter) Sub grants – Follow Operating Guidelines / Manuals PDA, LDI, CCT, WVFT to brief the STATUS JSDF 2 : OPC- internal financial controls procedures Statement of Expenditure (SOE) JSDF 1 : Fees as a management income against milestones Consultants, training and workshop against reports Maintain separate bank account Maintain separate records and documentation

Grant Allocation JSDF 1- Bank JSDF 2- Receipient 1Sub-grants1,400,000860,000 2Consultants350,000 3Training & Workshop200,000 4Operating cost100,000 1,950,000960,000

Bank Financial Management Requirements JSDF 1-BankJSDF 2-Receipient 1 Project Financial Management System NoMaintain project records and documentation 2 External AuditNo Bank Supervision External Auditor acceptable to the Bank 3 Financial Reports and Progress Reports Semi-annuallyQuarterly Audited Annually 4 Reports against claimsProgress reports against milestones Sub-grant distribution Statement of Expenditures (SOE) 5 Separate Bank Account Separate bank account for grant distribution Special Account ceiling $ 100,000 Exclusively for project expenses.

FM Requirements-Sub grants JSDF 1-BankJSDF 2-Receipient 1 Structure and FM System Committee, Planning and costing, Procedures & authorization Operating Guidelines (OPG/OM) 2 Audit and Monitoring 3 Records and Documentation 4 Reports against claims 5 Separate Bank Account

Operating Guidelines 1 Nature of financial instruments and payment terms i.e. form of contract, financing agreement, MOU, proposals 2Requirements for a community to have a separate bank account, to account for and report on the sub-project funds and frequency of public disclosures. Document to be retained, location and for how long. 3 Justification of payments, time and documentation required to make a sub-grant payment. 4 Adequacy and capacity financial team to provide training support to communities in accounting and bookkeeping 5 Monitoring and audits of community accounts to ensure proper usage of funds, transparency, and accountability 6 Mechanism to ensure transparency and accountability in the activities of the community management committee

FM Issues at Subproject level Inactive committee members Misuse of fund by chairman and committee members Cash Transfer - Beneficiaries did not receive funds, receive but not at full amount Deficiencies in records and documentation Fake receipts and forged signatures Revenue collection management